Here's another question I just thought of: I love the UltraDow. Is there anything that allows us to buy 2x leverage shares of foreign ETFs such as ewt, ewj, ewy???
I have been trading these ProShares for a while now, mostly holding as a hedge against the long stocks in my portfolio (or vis versa). The QID (ultra short) and QLD (ultra long) are fairly heavily traded, so they seem to track pretty close to 2X the actual Q's intra day, but the others need some more action. The DDM (ultra long Dow 30) and DXG (ultra short) do not track as closely, it appears most up/down adjustments are made overnight. (This is apparent in the frequent gaps in closing / opening prices). For example: I will notice the Dow is down .5% intraday, yet the DXG is only up .7%, where it "should" be a full 1% up if truly 2X. The sector funds are brand new and still extremely thinly traded, so I have not yet even attempted trading them. I do agree these ETF's are great tools and the new funds should be very useful once they gain popularity. Another benefit is that you can use these to go short in an IRA which is typically not allowed.
you like DDM..... There isnt at the moment but Im sure they are about to do something about that very soon. Im sure Rydex will be coming out with some of their own ETFS to compete with Proshares as well. Right now Proshares owns the market in inverse funds. If your looking for a fund that does the total opposite of the Emerging Markets its DXESX. Trading under 8 at the moment, I think I may add some shares to this mutual fund, think its ready for a 15-20% gain sometime in the next 2-4 months. It took a nice drop in 2006 falling nearly 50%, down this year as well close to 7%, but things can turn on a dime if the emerging markets were to give back alot of their gains. DXESX trading at $7.84 2-3 month price target = $9-9.50
you mean DXD. I have traded SDS QID QLD DXD TWM just started trading TWM, traded it a few times. SO far making out with a profit, however I jumped in toooo early yesterday at an even $65 or ^RUT 818. Looking for a pullback on the ^RUT to 815 before I sell. These Proshares 2x are VERY RISKY. Looking to get back in QLD under $83.00 in the next couple of weeks.
S2000 & Topdown - thanks. I am looking for vehicles that gives me leveraged index exposure to foreign markets - short and long - exactly what you described. I appreciate the feedback. Most of the proshares I checked out based on costaverageman's post seem to be in their infancy in terms of volume and liquidity, but it seems that they will be well worth the wait once they pick up. A foolish thought crossed my mind earlier this week: I was going to go long on the UltraDow. But then I thought twice and decided it would probably be better to wait for the next correction to do that, seeing that we're at an all time high here, and I'm personally not in the bull conviction camp short term (I am long term).
welcome, yea most of those ETFs just came out, will take some time before they start picking up volume, as for QLD and QID those trade millions of shares and continue to find new investors everyday. As for your foolish thought, I myself have another account for the long term 2-4 years. Just opened it up and patiently waiting for a pullback of at least 3-5% before I make my first purchase. Im looking at DDM, SAA, UWM, DVY, and SDY. There are more im looking at but cant find my notes at the moment. Whats holding me back is this rally, I know if I commit to buying at least half of my picks now and we get another 5% run followed by a hard correction of 8%+ I will be holding these stocks for quite sometime before I even break even again. Seems going and long or short at this moment is just risky either way. Would contribute at least 50% of my account to long positions on a dip below (7% drop from 12800) 12,000 and the rest of the 50% on anything below 11200. Not that we would ever get to that area again but you never know. I just dont see another 10-15% rise from here without a 3-5% pullback.
Has anyone done a formal correlation between these leveraged ETF's and the index they are attempting to mimic? Just eyeballing charts they dont look like they are tracking very well (gains are often less then 2X and losses are often more then 2X) Not that I would expect a free lunch of 2X leverage without any cost but I'm wondering how close they really do track. If they were able to track closely these would be great vehicles for long-term buy and hold investors to replace index mutual funds, e.g. if the you expect the market to average X over the twenty years here is an easy way to get 2X returns. I don't know if this link will work but take a look for yourself: http://tinyurl.com/2pz3ss QQQQ ended up around 18% for the past year but QLD is only up 25% not 36%. Is there a difference in how dividends are paid out that can explain this?
Those are great questions that I'd love to know the answer to, as well. Maybe it's the expense structure? If so, that's complete BS.
reason why QQQQ is up 18% and QLD up only 25% is because it started trading late 2006. For 2007 it should be in line with what the QQQQ does, also keep in mind that QLD paid a very big Dividend in December.